Satan Ninja 198X is the tale of Eddie McCarthy, an unpopular high school senior who spends most of his time down at Pizza Wizard, a local arcade hot spot. While playing the two-player hack and slash: Double Dudes vs Satan Ninja on his birthday, Eddie begins to face the second form of the final boss, when he is kicked off the cabinet by a punk named Razor. After his other friends ditch him, he decides to call it a night. Later that night, Eddie dreams of himself in the game, the babe in need of rescue takes on the form of Veronica LeBrock, Eddie's school crush. Together with Dude Shinobi, the two defeat the Satan Ninja.

Across town, Dean Slater, college superjock, reveals how Veronica dumped him earlier that day and is planning to get back with her to his newest co-ed conquest, Trish Cates.